COVID-19: FCA final guidance on proving presence of COVID-19 in BI insurance claims
Following consultation, the UK Financial Conduct Authority (FCA) has published final guidance on proving the presence of coronavirus (COVID-19) in business interruption (BI) insurance claims, following its BI insurance test case.
The guidance is for policyholders, insurers (including managing agents at Lloyd's) and insurance intermediaries on how the presence of COVID-19 in a particular area may be proved. It is based on the High Court's judgment and declarations and the additional statements from the Supreme Court in the context of insurers' obligations under the FCA's rules to handle claims fairly.
The guidance is intended to
- provide clarity for all parties;
- help ensure that the process of proving the presence of COVID-19 is made as simple as possible for eligible policyholders; and
- enable those policyholders to receive claim payments as early as possible.
The guidance is the FCA's view and does not prevent policyholders using other sources of evidence or putting forward their own arguments in respect of the sources of evidence referred to. The FCA plans to publish a COVID-19 calculator to help policyholders to carry out the calculations in chapters 7, 8 and 9 of the guidance. Policyholders will be able to use the results of the calculator to evidence whether COVID-19 was likely to be present in their policy area. However, it is also open to policyholders to carry out calculations themselves. The calculator should be available soon.
The guidance comes into effect immediately and ceases to have effect on 31 January 2022, by which time the FCA expects that all issues relating to proving the presence of COVID-19 will have been resolved.
Solvency II: EEA Joint Committee Decision incorporating into EEA Agreement Implementing Regulation on mapping of credit assessments of ECAIs
Decision 111/2018 of the EEA Joint Committee has been published in the Official Journal of the European Union (OJ). The Decision concerns incorporating Commission Implementing Regulation (EU) 2018/633 on the mapping of credit assessments of external credit assessment institutions (ECAIs) under the Solvency II Directive into Annex IX (Financial Services) of the EEA Agreement.
The Decision was made on 21 September 2018. Its date of entry into force is specified as the later of 22 September 2018 (provided that all notifications under Article 103(1) of the EEA Agreement have been made) or the date of entry into force of Decision 62/2018 of 23 March 2018 relating to the incorporation of delegated and implementing regulations under Solvency II.
Solvency II: EIOPA comparative study on non-life underwriting risk in internal model
The European Insurance and Occupational Pensions Authority (EIOPA) has announced the launch of an EU-wide comparative study on non-life underwriting risk in internal models under the Solvency II Directive. The related documents are accessible on a dropdown menu on its webpage, including an instruction document, surveys and a Q&As template.
Firms have until 15 September 2021 to submit results to their national competent authorities (NCAs). NCAs then have until 1 October 2021 to submit information to EIOPA. Firms are advised to submit a first batch well before the deadline so that potential re-workings do not create unnecessary additional submissions.
EU Taxonomy Regulation: EIOPA final report on KPI disclosure obligations
Following consultation, EIOPA has published its final report setting out technical advice to the European Commission on key performance indicators (KPIs) under Article 8 of the Taxonomy Regulation, specifying the information to be provided by insurers and reinsurers to comply with their disclosure obligations under the Non-Financial Reporting Directive (NFRD).
EIOPA proposes requiring two most relevant KPIs on sustainability that depict the extent to which:
- the insurer or reinsurer carries out taxonomy-aligned activities - in terms of non-life gross premiums written; and
- the insurer or reinsurer is funding or financing taxonomy-aligned economic activities - in relation to total investments.
EIOPA considers that these KPIs on sustainability provide relevant information to financial markets, depicting fairly the insurers' and reinsurers' business models, underwriting policies and investments, and allows for comparisons with other financial sectors and non-financial undertakings.
The European Banking Authority and the European Securities and Markets Authority have also published their technical advice to the European Commission on KPIs under Article 8 of the Taxonomy Regulation.
EIOPA and Japanese FSA insurance sector cooperation
EIOPA has announced that, on 26 February 2021, it exchanged letters with the Financial Services Agency of Japan (JFSA) on cooperation in the areas of insurance regulation and supervision. The letters from EIOPA and the JFSA have also been published.
The exchange of letters aims to promote mutual understanding, exchange of information and technical assistance between the two authorities. The JFSA and EIOPA will continue to engage in a dialogue to seek to identify areas for cooperation and share information on regulatory developments of mutual interest, including the development of international standards.
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Authored by Yvonne Clapham